A Guide to Financial Regulation for Fintech Entrepreneurs

CHAPTER 4The Financial Services Industry

Financial services is a catch‐all term for all those institutions that provide services in the realm of finance to their customers, whether those customers are individuals or companies, and whether the latter are a small SME or a large multinational corporation, or some other entity like, for example, an investment fund. Within financial services there exist a number of segments (see also Figure 4.1):

FIGURE 4.1 Classifying Financial Services by Institution

• Classic and Corporate Banking
• Specialised Lending
• Investment Banking and Advisory
• Payments
• Asset Management
• Brokerage and Transaction Services
• Insurance
• Others.

I'll go through these different sectors in turn. It is important to understand, though, that this is a somewhat artificial split. There are numerous business models in financial services, and many of them are either ultra‐specialised within one of the segments above, or they straddle multiple segments at once.

4.1 Classic and Corporate Banking

Classic and corporate banking is about the core banking business of gathering deposits, making loans, and moving money around, both for individuals and for companies. Often those institutions offer ancillary products, eg brokerage and custody, asset management, or even insurance. There are a large number of business models in this space, which differ in size, and product and customer ...